Credit crisis squeezes travel spending of super rich

6th Oct 2008

The financial crisis is forcing even the world’s super rich to sharply cut back their travel expenditure. The once-booming private jet market is now showing signs of a marked slowdown following the implosion of financial markets, according to a new study released by UBS.The report says that after five years of rapid growth, private jet users are now flying less, with some trying to sell their aircraft. Available inventories of used aircraft in the US are 37 per cent higher than a year ago.

The Swiss bank warned that deteriorating business conditions was leading to a rise in the number of delivery positions available for new corporate jets, as well as the availability either from the manufacturers or from existing customers, who could no longer take the aircraft.

In its annual forecast for business aviation, released yesterday, Honeywell Aerospace, a leading equipment supplier to executive jets, said business aircraft flight activity was falling in the US and in Europe.

“Operators appear to be reacting to economic pressures and unexpected fuel price increases by reducing activity and in some cases putting aircraft up for sale.”

Honeywell said deliveries of business jets were still forecast to rise to a record level this year and again in 2009 due to record order backlogs at the manufacturers led by Bombardier, Cessna and Gulfstream.

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Some of the most important emerging business jet markets such as Europe, and especially Russia, have been hit hardest by the credit squeeze, compounded the weakness of the US market.——-